Types of Loans Quiz

What is an open-end credit?

• A loan obtained without the use of collateral

• A loan obtained by offering an asset as collateral

• A line of credit that can be used repeatedly, within an established borrowing limit

• A loan for a set amount that requires regular payments at certain intervals

Which of the following is an example of closed-end credit?

• Vehicle loan

• Credit card

• Home-equity line of credit (HELOC)

• Payday loan

What happens if you default on a secured loan?

• You receive additional credit

• You pay higher interest rates

• You face collections and possible lawsuits

• You lose the asset offered as collateral

Which of the following is an example of an unsecured loan?

• Mortgage

• Vehicle loan

• Home-equity line of credit (HELOC)

• Payday loan

What does APR stand for?

• Annual Percentage Rate

• Average Payment Rate

• Annual Payment Rate

• Average Percentage Rate

Which loan option has the lowest APR?

• Bank or credit union loan

• Payday loan

• Car title loan

• Credit card

What is the maximum APR allowed on payday loans for military personnel?

• 390%

• 36%

• 20%

• 7.5%